The Sutton Shareholdings Board approved the establishment of a new not-for-profit organisation, a Community Benefit Society (CBS), as a subsidiary of Sutton Living Limited. This new entity will be registered as a provider of social housing, enabling the council to access additional funding for affordable housing initiatives.

Establishment of a Community Benefit Society

The Board approved the establishment of a charitable Community Benefit Society (CBS) as a subsidiary of Sutton Living Limited (SLL). This new entity will be registered with the Regulator of Social Housing (RSH) and recognised as an exempt charity by HM Revenue & Customs (HMRC). The primary purpose of the CBS is to become a Registered Provider of social housing, which will allow SLL to access greater funding streams from bodies such as the Greater London Authority (GLA) and the Ministry of Housing, Communities and Local Government (MHCLG). This initiative is part of the council's strategy to increase the supply of affordable housing in Sutton and reduce reliance on temporary accommodation.

The proposal was presented by Therese, who explained that while SLL was originally set up as a developer, its focus has shifted to acquiring homes for affordable housing to assist the council with homelessness pressures. The new structure will allow the CBS to apply for grant funding, which is currently unavailable to SLL. Councillor Sunita Gordon, Lead Member for Resources, chaired the meeting, with Councillor Jake Short, Chair of the Housing, Economy and Business Committee, also in attendance.

During the discussion, concerns were raised regarding the financial commitments and potential exposure for Sutton taxpayers. Rob, a legal advisor, clarified that while the ring-fencing agreement ensures that the CBS can seek support from SLL or the council, there is no legal obligation for the council to provide financial support. The decision-making process for any future financial support would depend on the specific circumstances and would be subject to rigorous financial appraisal.

The Board also discussed the need for a stressed business plan to understand potential financial risks, such as interest rate changes and increased costs. It was confirmed that a fully stressed business plan would be produced and presented to the Board before the second stage of the RSH registration.

The governance structure was also a key point of discussion. The CBS will have its own board, with a majority of independent members required upon registration with the RSH. The Shareholder Agreement outlines the control mechanisms, with the Council retaining direct control over the CBS's borrowing and the approval of its business plan. The agreement also details four specific matters requiring Council consent: material correspondence with the RSH, changes to shareholder status, any borrowing by the CBS, and the adoption or material variation of the CBS's Business Plan.

The Board approved several recommendations, including the establishment of the CBS, its registration with the Financial Conduct Authority (FCA), the group and governance structures, the CBS Rules, the Shareholder Agreement, the Ringfence Agreement, and the Governance Policy. Minor consequential amendments to the documents to ensure the registration process is completed were also noted.

The meeting concluded with Councillor Gordon thanking members, officers, and the public for their attendance.